Some Democratic hopefuls for the 2020 presidency have taken to saying that they do not support “for-profit charter schools.” (See here and here and here.)

On July 07, 2019, Network for Public Education (NPE) executive director, Carol Burris, called them out for promoting a false distinction. Below is Burris’ commentary, in part:

When Democratic candidates are questioned about charter schools, many typically reply, “I am against for-profit charter schools.” Everyone cheers. Politicians have created a convenient (and false) dichotomy that says nonprofit charter schools are good, and for-profit charter schools are bad.

Don’t be fooled. There are now only 2 states that allow for-profit charter schools—Arizona and Wisconsin. California changed its laws.

However, 35 states allow for-profit Charter Management Organizations (CMOS) to run their nonprofit charter schools. …

The question candidates need to answer then are:

“Do you support for-profit Charter Management Organizations, and if you do not, what are you going to do about them?” …

There is a reason the charter lobby never complains when a candidate says that he/she is against for-profit charter schools. It means nothing will change.

What Burris demonstrates is that there are layers to profiteering off of charter schools, with the term “nonprofit” being a key distractor to layered profiteering.

The for-profit CMO behind the “nonprofit” charter school is one such example, but there are others.

For instance, consider the California-based Today’s Fresh Start Charter School (TFSCS) chain, which is a nonprofit that lists Jeanette Parker as its founder and CEO (see here also).

According to TFSCS’ own 2017 audit, TFSCS lists the following “related party transaction” in which CEO Jeanette Parker leases facilities from Los Angeles School Services, Inc., though the TFSCS audit does not name the “related party”:

The charter school leases some of its facilities from Los Angeles Schools Services Inc., a California non-profit corporation. The property is owned by a related party of the charter school who leases the property to the California non-profit corporation. The rent in the amount of $810,201 for year ended June 30, 2017 was paid to the California non-profit corporation. …

Future minimum lease payments to this related party as of June 30, 2017 are as follows:

The Parkers have cast themselves as selfless philanthropists, telling the California Board of Education that they have “devoted all of our lives to the education of other people’s children, committed many millions of our own dollars directly to that particular purpose, with no gain directly to us.”

But the couple have, in fact, made millions from their charter schools. Financial records show the Parkers’ schools have paid more than $800,000 annually to rent buildings the couple own. The charters have contracted out services to the Parkers’ nonprofits and companies and paid Clark Parker generous consulting fees, all with taxpayer money, a Times investigation found.

The April 15, 2019, Canyon News reports that Clark Parker resigned as Southern Coast Air Quality vice-chair as a result of the scandal created by his and his wife’s CA-charter, self-dealing:

Today’s Fresh Start charter school founder Clark Parker will resign from his role as the Southern Coast Air Quality Vice Chairman in wake of an investigation by the Los Angeles Times. Parker is slated to vacate the role on April 30. The LA Times first reported on Clark and his wife in a story published on March 27. …

Parker was paid $800,000 in annual rent charter schools, and hired Clark who was paid $575,000 to manage the schools construction project which he denies the allegations.

The 2017 TFSCS audit mentions the construction contract; however, the company name it provided, California Construction Management, Inc., produces no viable, active-company results in a business entity search with the California Secretary of State (CA SOS).

However, the Parkers’ self-dealing with charter school rent is clear. Los Angeles Schools Services, Inc., is on file with the CA SOS, and it lists Clark Parker as CEO. Moreover, according to the IRS, the organization (under the slightly different spelling, “Los Angeles School Service”) was a nonprofit for only three months, having been granted nonprofit status on May 01, 2015, and then having it revoked on August 15, 2017, for failure to file a return.

In fact, the TFSCS tax returns are suspiciously thin on information: They are astoundlingly weak in sections that require written descriptions of activities and policies; for example, on the TFSCS 2017 return, under “mission,” there is only a single word, “education; on its Schedule O, under “documents available to public”: “No documents available to the public”; under “review process”: “No review was or will be conducted.” Furthermore, the 2016 TFSCS tax return omits mentioning CEO Jeanette Parker’s salary altogether and lists all board members as contributing “0.0” hrs/wk.